Frank J. Aiosa
Dolan Media Newswires
Long Island, NY – Corporate health care expenses have nearly doubled during the last seven years. Employers are responding to the increases by reducing benefits, which is resulting in more employees waiving coverage.
To lower costs and maintain or improve benefits plans, companies should aggressively manage their programs.
With back-to-basics thinking, employers should review workflows to ensure they are administering benefits programs effectively. Poor administration leads to unnecessary expenses.
Forward-thinking employers include a number of medical options in their benefits programs, including:
high-deductible health plans; health reimbursement arrangements and health savings accounts; and co-insurance in lieu of physician, emergency room, laboratory and prescription co-pays.
Employee contributions are one of the most misunderstood components of a benefits program. Many employers believe little or no employee contribution leads to higher employee satisfaction. Employers should rethink that position. Typically, employers that have contributions that are lower than normal have greater enrollment and family participation. The result is an over-insured work force, leading to higher-than-necessary costs.
Wellness programs are gaining greater attention. Many studies show a healthy work force results not only in lower medical claims costs but also in higher productivity. Leading organizations build a culture of health and implement comprehensive wellness programs.
As insured health care costs continue to increase, many employers are beginning to strongly consider alternative arrangements including self insurance. Historically employers consider self-insuring medical plans as they approach 300 covered employees. Today, the number is much lower. Some of the benefits of self-insurance include eliminating costly state-mandated benefits, eliminating premium taxes and increasing plan design flexibility.
Self-insuring dental benefits is almost always the right answer. Some dental carriers will self-insure a program with as few as 30 covered employees. This is often the best way to provide the richest benefits to your employees at the lowest cost.
The review of any self-insured program must be conducted with proper diligence. Proper compliance with state and federal regulations reduces the likelihood of costly lawsuits.
Frank J. Aiosa is a partner at Chernoff Diamond & Co.